comments (125)
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antio82
17/10/2012 11:14
In 2007 your COO told analysts that the UK unit's profits were funding Starbucks' expansion overseas. Your CFO added that the UK enjoyed operating profit margins of almost 15% - nearly £50m in profit.
A year later, after filing a £26m loss in the UK, your CEO, told investors the business here was so successful he planned to apply the lessons in the US. Your CFO called the UK business "profitable" in 2009 after accounts revealed a record £52m loss.
Not only you evade taxes, you are a liar too.

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terryos
18/10/2012 10:52
In reply to: antio82

How can Starbucks tell Companies House and HMRC that its UK business is loss-making but tell analysts in SEC-regulated calls that the UK business is profit-making, without either making misleading financial statements or filing false accounts? I can't wait to hear Troy Alstead explain that to Margaret Hodge.

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catcatcatcatcat
13/11/2012 12:05
In reply to: terryos

I have created an e-petition which will hopefully go live in a couple of days. I used your words because you seem to know what you're talking about. You're pointing to fraud effectively, securities or accounting!

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ratcatcheruk
12/11/2012 06:10
In reply to: antio82

I am writing to my MP too and to the Director of the Serious Fraud Office concerning this utterly cynical treatment by Starbucks of UK authorities. I am totally aghast at PAYE and NI charges being cited as corporate profits taxes by Starbucks's muppet UK management. This behaviour would not be tolerated in the US so why does Starbucks insult each and every one of us here in the UK by lying ? I hope that Starbucks ends up facing British justice for the tax dodging fraudsters they apparently are

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DecEight
13/11/2012 07:52
In reply to: antio82

No matter how much you protest - you know that we know that you are ripping off the british people - time to pay up or go home

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DecEight
13/11/2012 07:54
In reply to: antio82

Your claims are bogus - as are your postings to defend the undefensible on this blog

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Simongoodley72
17/10/2012 11:32
Kris - how exactly can you claim that PAYE is a tax on Starbucks? Come on. It is a tax on your employees, surely?

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Simongoodley72
17/10/2012 11:40
And why has the post now been changed to exclude the reference to PAYE?

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Simongoodley72
17/10/2012 11:41
Your first thoughts were: "The most important thing to understand is that Starbucks does pay tax in the UK. Indeed over the last three years we have paid over £160 million in various taxes including Pay As You Earn (PAYE) for our 8,500 UK employees, national insurance and business rates”.

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antio82
17/10/2012 12:00
Amazing!! You actually changed your statement after you realised that PAYE is tax YOUR EMPLOYEES pay out of THEIR salary, and not tax YOU pay!

That says HEAPS about how you approach this subject.

Thanks for spotting it Simongoodley72. I guess Starbucks lawyers aren't as quick...

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terryos
17/10/2012 12:27
Royalties are payments made for using intellectual property that is not owned.

Starbucks Corporation owns the Starbucks brand. Starbucks Corporation owns Starbucks UK. Starbucks has been paying itself 6% turnover to use something it already owns. What was going to happen if Starbucks UK didn't pay - Starbucks was going to sue itself? Absolutely ridiculous and laughable.

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terryos
17/10/2012 12:31
I've written to my MP asking for Parliament and the Revenue to investigate what looks like tax evasion to me - pretending to pay royalties for something already owned in order to pay no corporation tax for a decade. I'm going to run down the balance on my Starbucks card and then I'll never enter your stores again. Ethical business? You must be joking.

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PirateTimelord
17/10/2012 12:39
You say you are committed to opening around 300 new stores? How then do you explain the closure of so many stores in recent weeks/ coming weeks? I can't claim I know much about it, but given comments around these closures on your social media pages, the sites were regularly busy, and thus I'd expect were profitable. Surely it would therefore be more cost effective to have kept these stores open, rather than closing them, and subsequently having to locate premises and open new stores?

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max_fm
17/10/2012 13:17
I'm really disappointed in reading about how you as a company have evaded paying your fair share of tax by setting up in Swizerland. For years I've been a loyal customer, buying into the 'fairtrade' sales pitches, appreciating the little hand drawn smiley faces on my paper cup...
... but no more. I'm gone - you greedy bastards don't deserve my money.

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andywall10
17/10/2012 13:37
Simongoodley72 - You're a star! Well spotted!

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tax-man
17/10/2012 21:17
Wow, Starbucks pays national insurance. Yawwwwwn. So do all uk companies.

There is a big difference between mere tax savings for genuine legitimate reasons and the continual non payment of any corporation tax whatsoever by abusing the tax system.

I want to see all corporations operating in the uk paying proportionate rates of tax and contributing their true fair share to the uk economy.

Come on George Osborne, sort out these tax free operations.

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tax-man
17/10/2012 21:21

BTW, I too will not be using Starbucks or any ot the other large US corporations adopting dodgy tax abusing policies. We're all in this together. Yeah, sure we are.

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tax-man
17/10/2012 21:29
http://www.bbc.co.uk/news/business-19967397

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shadowmatt
18/10/2012 02:27
One question about your great tax dodge.

Do any of your staff receive government benefits like Working Tax credits of Housing Benefits?

I would assume at least some of them do with Starbucks pay rates, especially in London. That would mean, as you are fiddling you books to make it look like you are taking a loss, that the public are paying to top up the wages of your staff.

IE Im paying tax through my wages which is then used to subsided the poor wages that Starbucks pays its staff.

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shadowmatt
18/10/2012 02:31
Also Kris, as the Managing director of a failing company, one that consistently posts a loss are you not considering resigning. There is no point rewarding failure.

Do you have a business plan for when people can no longer afford your coffee, or if / when power stations cannot meet capacity and we start having blackouts. What happens when your staff are taken ill. Do you use our roads, ports, police and other services in the running of your company. All these examples are funded by Tax.

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cookstar1974
18/10/2012 02:34
Dear Mr Engskov,

Why are you looking to open more stores when your accounts show tens of millions of pounds of losses each and every year?
Why do you tell investors that the UK business is profitable yet show losses in your UK accounts? Which is true?
Who audits your accounts?
You state you will pay tax 'to the letter of the law' and also state you have 'the highest ethical standards' - do you agree that your lack of tax contribution to the UK shows the lowest ethical standards?



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shadowmatt
18/10/2012 02:34
Kris, if you want to make a lot of money in low tax countries where government expenditure is kept to a minimum have you not considered moving to a country like Sudan or the Congo?

In these places little or no tax is collected and as a result your profits won't be wasted on such things like police, infrastructure or competent government. You would be free to make as much money as possible in a less controlling environment than we are obviously forcing you to operate in now.

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shadowmatt
18/10/2012 02:41
One final point. I hope you realise you are attacking your customers with your aggressive tax avoidance. Funnelling money out of the UK by declaring loses when you are very profitable is damaging to our economy and is a factor in why we are currently struggling.

It would be nice if you saw your tax payments as an investment in the UK and that a strong UK would probably lead to higher profits in the long term.

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shadowmatt
18/10/2012 02:49
Have you considered what would happen if there was a fire in one of your London stores now we are having to close 1/4 of the fire stations in London with the loss of hundreds of jobs?

I bet if the Fire Service didn't turn up or were late you would be all over TV criticising them and demanding better service. Yet it is you who refuses to pay TAX for services like these.

Have any of your stores been damaged in riots or protests? There is going to be a lot less police in the future.

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GoogiesFolkestone
18/10/2012 05:09
I am an independent coffee shop owner based in Folkestone (Googies), . I find it disgusting that you syphon millions of UK taxes out of the UK. We have a campaign running in Folkestone which has currently over 4000 "Likes" and a "1000 "share" all over the UK. PAY YOUR TAXES AS WE DO
https://www.facebook.com/photo.php fbid=10151253713480944&set=a.275916405943.187845.174461280943&type=1&theater&notif_t=photo_comment

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GoogiesFolkestone
18/10/2012 05:11
THIS LINK SHOULD WORK

http://tinyurl.com/cbp9x9j

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Ieopold
18/10/2012 06:59
I am deeply disappointed about the whole affair and feel I have been misled by promises on the one hand (ethical sourcing) and disingenuous behaviour towards our very own society on the other.

What is even more frustrating is that it seems (current) Starbucks UK management still think they have a defendable position in this all.

The only solution is: Admit, Quit & Turn it around.

My hope is Starbucks Global Management will make clean ship as soon as possible.

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JuneThorpe
18/10/2012 11:21
Starbucks, Google and Facebook

http://www.youtube.com/watch?v=rncDkWvTu7g

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JuneThorpe
18/10/2012 11:23
Speaking to CNBC in February 2009 about his concerns over the global economic crisis, Schultz said that "the place that concerns us the most is western Europe, and specifically the UK", which he considered to be in a "spiral", expressing concern with the levels of unemployment and consumer confidence in the country.

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JuneThorpe
18/10/2012 11:26
The Starbucks CEO is concerned about the economy, unemployment and the general direction of the country.

America that is!

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cooperphil
18/10/2012 11:45
Kris, I'm sorry to have to tell you this, but nobody is being taken in by your woolly attempts at justifying your company's aggressive tax-avoidance. You're talking like a politician trying to media-manage a scandal. It discredits you and insults us.

It's simple: Starbucks must pay the appropriate amount of UK corporation tax - not the amount it can get away with, but the appropriate amount - or I won't buy your coffee again and nor will thousands of others. There are plenty of other options.

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Dismayed
18/10/2012 16:33
I never realised you were crooks, I'm so disappointed in your company.

Fortunately your competitors are happy to take my money, and pay tax on it.

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JPrice1234
18/10/2012 22:44
Don't just have a moan here.
STOP BUYING THEIR COFFEE UNTIL THEY COUGH UP AND PAY TAX!

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SailorJery1
19/10/2012 03:32
Use a local coffee shop where they know how to make really fantastic coffee for less money, with better service; where they are primarily interested in your enjoyment of what they do, above all else. I've recently been converted to a local coffee shop - small, comfy sofas, good wifi, very helpful staff, dog-friendly. The best coffee I've ever had. Come on Starbucks, play fair, stop avoiding taxes and raise your game to meet what you claim. Do the right thing.

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stuartjphillips
19/10/2012 04:01
Stop Lying Kris.

You're tax dodging and stealing money from my pocket and those of the other tax payers in the UK who are paying more to reduce our budget deficit. Your tax dodging is stealing money from those whose benefits are cut to reduce the deficit. I have been a loyal Starbucks customer, but in the current environment i cannot morally give my custom to a company so bereft of social conscience.

Stuart


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james_t
19/10/2012 04:50
So to be clear - while you have removed the direct reference to it, the £160million of tax quoted in your blog still includes PAYE? A tax on your employees NOT on Starbucks. Perhaps you would like to consider revising this figure to give a more accurate reflection of your tax affairs?

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russell_c
19/10/2012 13:28
Laughable. Ethical my ar*e. Created account to advise I'll be going elsewhere in future.

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Spw268
19/10/2012 14:23
The statement is just PR waffle. The deliberately vague "various taxes", which could be PAYE, NI contributions, VAT etc - not corporation tax which is what we want to know, how much tax is Starbucks paying on their income/ profit ? And then the evasive "not yet as profitable as we'd like to be" - which dodges the question: are you making profits or not ? So the MD decides to dig an even deeper hole - goodbye reputation and goodbye customers...

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prs001
19/10/2012 14:36
Heard about this despicable situation, and thought I'd lend my voice of support from over here in the US.

I will be boycotting Starbucks, and telling everyone I know to do so as well.

This is yet another company thinking that being ethical is about putting a logo on packaging. Over here we are tired of all the big corporations thinking they can do whatever the hell they like just because they employ people. Job creators! But if Starbucks went bankrupt, a 1000 others could take their place

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1coffeequaffer
20/10/2012 01:09
Starbucks PR release is both spurious and devious.
It would be far better for UK inc. if we all took our coffee in cafe's that did not pay out huge royalties and use overseas suppliers to drain out all of the profits from the UK into lower tax countries. The employment taxes and VAT generated would be the same with a fair level of corporation tax on top.
Boycott Starbucks until they play fair.
I expect they won't unless the HMRC makes them - come on HMRC you need to tackle these corporations.

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mgpb1936
20/10/2012 01:11
Dear Kris, regarding your purchasing operation in Switzerland for raw coffee beans. Is this yet another transfer pricing dodge? I understand that raw beans are shipped into warehouses in Holland and not Switzerland.
If this is not transfer pricing what is the rationale behind this?
I had beleived Starbucks to be an ethical and decent company....is this just window dressing?



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MGPB1936
20/10/2012 02:59
Dear Kris,
Since my last post I have Googled 'Starbucks' and found other disturbing other very disturbing reports on your company;
- Paying part time staff in the USA just under the qualifying 20 hours so that receive health benefits...is this true?
-Starbucks took a small coffee roaster to court for offering a product named 'Charbucks' and Starbucks lost the case? link https://blackbearcoffee.com/Starbucks/What%27s_it_all_about.htm
Is this Ethical or Local?

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Alex-AT
20/10/2012 03:08
It appears that the £160M various taxes includes £87M in VAT, which I assume is the tax that you take from your customers upfront on anything you sell in the UK.

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MGPB1936
20/10/2012 04:22
In reply to: Alex-AT

Dear Kris,
Is it true that you 1000 apprenticeship scheme is funded the UK Goverment and paid for by the British tax payer?

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Rob1423
23/10/2012 07:28
I am disgusted that Starbucks has only paid £8m tax on £3bn worth of sales since 1998. My wife and have been loyal customers for over 10 years but we will never enter a Starbucks again until you start to pay your fair share.

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thewritingninja
23/10/2012 08:50
http://www.youtube.com/watch?v=rDqatJPvOfk

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enyxraj1
24/10/2012 04:24
I think you people need to understand a few basic points:

(1) Starbucks is a high volume, low margin sales business so you can't talk the amount of CT it pays in the context of 3 billion revenues. Instead, you need to consider the profits (only a very small % of sales revenue).

(2) Starbucks is avoiding tax by paying a royalty to the US, really?? They are saving tax at 23% in the UK, but paying tax on income in the US at 40% +.

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starfucksup
12/11/2012 09:03
In reply to: enyxraj1

@enyxraj1 - Wouldn't the profits "remitted" to the USstill be taxed at 40% in the US, the UK tax paid being offset against this amount, so provided UK corporation tax is below 40% the company should be indifferent to where the profits are made.......exept the US tax office benefits instead of the UK

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karlosfargis
13/11/2012 02:18
In reply to: enyxraj1

Profits made outside the USA are only taxed if sent back there. Over $1.5 trillion in profits from all US companies are kept overseas. So no tax is paid in the USA either.

The royalties were subject to a combined tax rate in the Netherlands and the US of approximately 16% - from Starbucks themselves.

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dr_mimm
13/11/2012 02:28
In reply to: enyxraj1

Re: (2) According to Troy Alstead, Starbucks' chief financial officer, royalities paid to the Netherlands were subject to a combined tax rate in the Netherlands and the US of approximately 16%. The UK's main corporation tax rate is 24%.

The royalty rate was 6% of sales, but has since been reduced. But there are other ways they're keeping the money out of the UK (and thus away from UK taxes) too.

See http://www.bbc.co.uk/news/business-20288077


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Iman1337
13/11/2012 03:17
In reply to: enyxraj1

Re: (1) Starbucks is a high volume, low margin sales business

Low margin? Good one. I needed a laugh.

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enyxraj1
24/10/2012 04:24
(3) Other low tax jurisdictions? Netherlands CT rate is between 20-25%, Switzerland up to 22% (because the various Swiss Cantons also levy tax on companies in addition to the federal CT). The UK rate is 23% for FY13, reducing to 22% in FY14! Understand the context because spouting nonsense.

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wr0ng1
13/11/2012 09:37
In reply to: enyxraj1

@Enyxraj1 - except that the coffee industry gets a negotiated tax rate in Switzerland and a special tax rate, which it is under obligation to keep confidential from the Netherlands. Others aren't spouting nonsense just because you don't have the supporting information!

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Hazellfam
25/10/2012 06:44
For me it is simple. Pay your taxes and I will start paying for your coffee again. But until then I will look elsewhere for my favourite drink (and there are plenty of alternative coffee shops out there - both brand and independent)

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starfucksup
12/11/2012 09:11
Clearly this distorts competition, where local domestic coffee shops have to pay tax on their profits they will be at a disadvantage to those that can strip profit out and pay a lower tax rate. PAYE, VAT and Rates are paid by all businesses.............unless Starbucks have found a rates wheeze too?

After5 years of regular morning and evening coffee from Starbucks, my coffee buying has shifted to Nero's, difficult to see anything that will change it back and it is no futher to walk!

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NotGonzo
12/11/2012 23:27
Blah blah lie. Blah blah NATIONAL FRIKKIN INSURANCE??? (after you deleted PAYE). Blah blah excuses and lies. Your coffee tastes like mud. Everything you sell is overpriced. Your 'brand' is worthless and everyone wishes you'd just pay what you owe then disappear into nothing. Stop lying and trying to get out of it, pay your bloody taxes and eff off.

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Jayarava
13/11/2012 00:01
Like most others I think this message is self-serving and disingenuous. Through an cunning accounting procedure Starbucks, which is a profitable business, avoids paying tax on those profits - thereby depriving the government of much needed revenue. I will be boycotting Starbucks indefinitely.

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Petlorenzo
13/11/2012 01:25
The only kudos you will get from me is allowing this to be open to comments. Beyond that everything about it stinks. This statement/ clarification is a joke. It is very clear that you have been dishonest in your dealings and totally unethical. For a company that bangs on about ethics that is unforgiveable as it smacks of total duplicity. To claim VAT, NI & PAYE as tax revenue is frankly ludicrous. To claim losses is ridiculous.Your policy in the UK was aggressive & detrimental from the outset. 2/

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craiglegrice
13/11/2012 01:25
Actually, this is a good response from Starbucks.

There are three issues here:

1. Starbucks is not yet really profitable in the UK.
2. Corporation tax is paid on profit, not revenue, which is how journalists are reporting this. Whether this is through ignorance or a desire to 'stoke the fire', it's bad journalism.
3. Companies, including Starbucks, use legal and lawful ways to reduce their tax liability. I would and so would you. For legislation, blame the politicians.

Craig Le Grice

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Petlorenzo
13/11/2012 02:04
In reply to: craiglegrice

They are issues so let's consider them:
1. We do not know if they are profitable or not. The accountancy is designed to baffle they claim no profitability on the one hand but to investors claim profitability.
2. Yes the clarification is justified but not all journos are misleading. The issue comes back to honesty over profit or loss. Starbucks made it worse by justifying tax position by including business rates, NI etc.
3. Whilst lawful the increasing opaque structures are immoral & unethical

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karlosfargis
13/11/2012 02:22
In reply to: craiglegrice

Journalists are not reporting it as a tax on revenue. They are reporting correctly.

The simple truth is that Starbucks are using royalty payments to themselves as a way to reduce profit to zero so as to avoid paying tax.

It's a duty to pay tax, for the things that it provides the country as a whole. Otherwise we wouldn't have roads, street lighting, schools, hospitals or social services of any kind.

As a strategist, are you being paid or have you ever been contracted by Starbucks?

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ruse10001
13/11/2012 05:06
In reply to: craiglegrice

So you're a WPP strategist with Starbucks as a client.

*oh dear*

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ruse10001
13/11/2012 05:20
In reply to: craiglegrice

Perhaps you need to spend some time reading up on Social Media. Might help you to undertand when and how to leave a comment in favour of the client. Especially on a blog post that is simply flawed and until amended, didn't show any knowledge of who carries the burden of paying PAYE.

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Petlorenzo
13/11/2012 01:27
2/2 You sort to corner the market literally buying out the competition creating a de facto monopoly. If that was a business model it sure is broken. Your attempts to justify your avoidance was pathetic and your statement self-serving. If companies like yours want to make money (or ok, try) then you must pay tax fairly or frankly leave. The jobs would be absorbed by more honest traders (and frankly companies serving drinkable coffee- your product really is very very bad). Go away, try again.

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Petlorenzo
13/11/2012 01:34
just looking at this nonsense again...you are justifying your tax avoiding position by including "business rates"! Give me strength. As for your apprentice positions, 1,000 you say, out of 5,000 presumably at no wage, subsidised by govt money or lowest wage possible. This in turn raises questions - do you pay a living wage or minimum wage or above minimum wage? The issue over the claim of profitability has not been cleared up and suggests a lie to investors? Could raise problems in USA if true.

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KatyH100
13/11/2012 01:57
In reply to: Petlorenzo

I've defended my patronage of Starbucks to the raised eyebrows of friends and family for years. Citing the ethically sourced beans, wide availability of soya milk etc. But this is a completely unacceptable situation, for which there can be no legitimate defence. Unless, as others have already pointed out, Starbucks genuinely ARE making a loss in the UK - which seems highly unlikely given the continued growth of the chain in this market and the reports to investors of profitablilty

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KatyH100
13/11/2012 01:58
In reply to: KatyH100

I had to leave my comment as a reply because even though I'm logged in creating a new comment seems to be disabled.

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PaulThePole
13/11/2012 01:51
I hope that no one recommending a boycott of Starbucks is doing so on their iPhone or iPad ...

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Mark-meds
13/11/2012 01:52
You are leeches. I will never use Starbucks again.

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MinxMarple
13/11/2012 01:58
Whilst I appreciate your role in creating and maintaining jobs in the UK, and I also appreciate that you are not doing anything illegal, your decision-makers & business practices demonstrate a complete lack of morality. I know you think there's nothing wrong with all of this, that's what is so offensive. Until you take a more ethical approach, my entire family has decided not to purchase your products or be involved in your business chain. Please do better, so we can come back.

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wr0ng1
13/11/2012 09:43
In reply to: MinxMarple

[1/1] Starbucks (nor any other coffee provider) don't *create* jobs per se. Demand for coffee creates those jobs, Starbucks (and other coffee houses) benefit from that demand. There is a general myth that business are "job creators" whereas even a rudimentary understanding of economics shows that consumers create jobs in two ways:

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wr0ng1
13/11/2012 09:45
In reply to: wr0ng1

[2/2]
(1) they buy things or want to buy things, which sets up demand
(2) they work jobs in order to get money to buy things, which allows resources to be turned into commodities.

Business BENEFIT from this, they aim to get out more than what they put in from this demand and workforce. If these businesses went bankrupt, their niche would be filled by another business, but it is the demand and work which *creates* jobs.

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arkange1
13/11/2012 02:02
Do you *really* believe what you've written? Why do you find it so difficult to admit that you have a corporate policy to avoid tax and export profits? It's not illegal. Just perhaps not as ethical as your Fairtrade coffee aspires to be. But this is not just an issue of ethics and corporate responsibility, it's critically one of Competition. The independent coffee shops you help put out of business pay their corporate taxes. By avoiding tax through creative accounting you compete unfairly.

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madric
13/11/2012 02:03
If you can't turn a profit on selling coffee for £3 a cup, you should not be in business.
If you are deliberately declaring the profit you do make as some kind of "licence" fee paid to yourself to use the name you already own, you should be in jail.

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StarFucksTaxTheBiscuit
13/11/2012 02:10
In reply to: madric

LOOK- PEOPLE OF THE UK ; IT'S BLINDINGLY OBVIOUS THIS COMPANY IS SCREWING YOUR COUNTRY SO STOP BUYING THEIR COFFEE. IT'S BLOODY DIABOLICAL ANYWAY -SIMPLES!! p.s. please also stop buying sleazy Murdoch rags for the similar reasons

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madric
13/11/2012 02:14
In reply to: StarFucksTaxTheBiscuit

Yep, I don't do either.
Have not done for years.
No need to shout, go and have a nice cup of tea and a sit down.
Perhaps a jammy dodger if you're good.

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alweekes
13/11/2012 02:16
I can't add anything to the comments above but I will comment on this: -
"it doesn’t make good business sense for wholesale bean buying or roasting to happen in each country"
As anyone who knows anything about espresso knows, freshness of the roasted beans is paramount to the final product quality, roasting the beans as close as possible to the point of use to avoid delays between roasting and use is essential to a prefect espresso, something you know nothing about from tasting your product.

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StarFucksTaxTheBiscuit
13/11/2012 14:53
In reply to: alweekes

if only they knew as much about coffee as they did about tax avoidance

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getfuckedstarbucks
13/11/2012 02:18
BOYCOTT STARBUCKS.

Your coffee tastes like **** anyway.

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idlodge
13/11/2012 02:20
Dear Starbucks,

I really think you are missing the point entirely in trying to justifying this.

You have found ways to squeak these accounts through using various techniques permitted by UK law over a number of years.

However the negative impact on how your business is perceived by us, the UK people coupled with what looks like a poorly constructed corporate social responsibility is looking like it's going to bite you right on the bum bum!

Thanks for listening,

Ian

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coffeeskelper
13/11/2012 02:29
What an arrogant knobber!

I think this thread is going to have an ickle bit more activity today than of late. I'm gonna put the kettle on I think, now where are them biscuits......

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equerry
13/11/2012 02:30
I think that you are missing the point - Starbucks are using creative accounting to avoid UK Corporation tax by remitting UK profits to Amsterdam as 'royalties' - while this might be legal it is not ethical, particularly if this gives you competitive advantage against local independents who pay tax on their profits.
Your business is about coffee and your customers - you pursuit of profits could conflict with these core objectives.

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karlosfargis
13/11/2012 02:37
High rental costs? How do all the other businesses on the high street get by?

Pay various taxes? National Insurance is a tax but it is on employing people.
Please elaborate on "various taxes."

Royalty fee: this is nonsense and purely a way to reduce your profit. Are you a franchise and so not a part of the Starbucks corporation? If so, you should be closed down immediately and seek bankruptcy in the courts.

Your excuses are poor. 2/10 Must try harder.

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Cashcow666
13/11/2012 02:44
Starbuck's commitment to the UK amounts to one thing, and one thing only: corporate theft on an enormous scale.

Stop stealing money from poor people, you greedy corporate scum.

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Petlorenzo
13/11/2012 02:54
This is really a message to all brands / companies / businesses who want to operate in the UK. If you operate here you pay tax here on all transactions openly & transparently - otherwise quit. HSBC threatened to quit, the govt should have told them to go. Global brands leech money from communities & the country creating unfair burdens on others whilst paying millions to overseas investors, hedge funds, equity cos and so on.

If you don't want to play fair then leave. Others would fill the gap.

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richardcwgate
13/11/2012 03:04
Personally, I see this as a matter of social responsibility.
You can talk long and hard about the legal framework and hide behind that for as long as you like. But Starbucks use it to do one thing only, maximise profit. That's not a bad thing in itself but social responsibility has a cost if you really want to do it. So pay the tax.

From me, I will not be using Starbucks until they pay it.

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ParvaPower
13/11/2012 03:06
Reading these comments, it's obvious that your claims are simply not believed. A consumer boycott is the logical response.

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Braddox
13/11/2012 03:11
Don't worry Starbucks, your coffee tastes cack compared to the other major coffee shops anyway.

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5_HATS
13/11/2012 03:21
In reply to: Braddox

Dear Kris Engskov,
WE ARE NOT MUGS!!! Your company is massive and it is beyond belief that you do not make any profits in this country. You are siphoning off your companies profits through overseas subsidiaries so you are actively avoiding tax in this country. Whilst this is totally legal it is also totally IMORAL and you simply cannot expect to keep your customers when you are effectively shafting the country you are making so much money in. PAY YOUR BLOODY TAX
p.s. PAYE & does NOT count!!!!

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SanJose666
13/11/2012 03:18
Just pay up and stop wriggling - you seem to have no idea how much anger there is among the British public (your customers).
As for trying to claim that national insurance (paid by your employees) and VAT (paid by your customers) are enough, that's just scandalous.

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angry_barry
13/11/2012 03:23
Just adding to the chorus of people who are disgusted by your behaviour and won't be buying Starbucks again until you cough up.

Our schools are being cut back because there's not enough money in the coffers, and you have the audacity post this?

Look up Gerald Ratner if you'd like to see how quicky the British public can turn against a company.

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divadwg
13/11/2012 03:28
The reason you have an operation in Switzerland is to avoid taxes.
And the reason you pay a license fee to license your own product is to avoid taxes.

To put it in perspective, and to answer the idea that this is somehow normal free market practice, if you tried the same thing in the US, the feds would be at your door in a heartbeat.

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Spittingcat
13/11/2012 03:29
"buying operation in Switzerland and a shared roasting plant in Amsterdam"

Why is the "buying operation" not in the same country as the roasting plant? Do the beans pass through Switzerland on the way to the plant? Do you have an operational reason other than "tax efficiency" for the buying to take place through a Swiss company?

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Willneverbuyfromstarbucks
13/11/2012 03:35
The comments on this post are an infinitely better read than the article.

I simply cannot wait until the very last Starbucks closes its doors.

I do hope this is the beginning of the end for Starbucks. You'll certainly never get a single penny out of me.

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ToadfishRebecchi
13/11/2012 03:43
Kris, mate. Have a sit down and have a good think because this isn't good enough. We're not stupid.

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ToadfishRebecchi
13/11/2012 03:44
So; you've demonstrated that you really don't get it at all.
You've failed to realise that your weaselling about paying other taxes etc makes no difference; you are now seen to be (a) at best dissembling, at worst lying, and (b) tax dodgers at a time of cuts. Choose to do the right thing or not - I suspect you may be surprised by the results on your business if you choose "not". It's about perception, and you are not perceived well at all. Perhaps you don't care. You will.

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gar1975
13/11/2012 03:51
from the day i first heard about what taxes you avoid paying in the U.K i have stopped my daily visits to your stores & now use a local independent coffee house who actually pays tax on what they earn. i will not use a starbucks again until you do the same. shame on you!

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creditcrunch
13/11/2012 04:08
They do think we are stupid, the only way to show we mean business is to lobby the government to act and to spend your hard earned tax-paid money elsewhere.

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artumi-richard
13/11/2012 04:51
It seems to me that the mothership can charge what "licence fees" it like and the UK outfit has to pay that. But since, in reality the UK outfit is owned by the mothership it's all about the tax dodge. Royalty fees will be the mechanism by which Starbucks gets to decide where the profit goes.

I imagine those royalty fees are never the same from one year to the next. I imagine they are also decided retrospectively near the end of a tax year. If that was done each year it would be "consistent"

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toplard
13/11/2012 04:54
I'll turn the UK into the worlds biggest tax haven.

http://gco2e.blogspot.co.uk/2012/11/i-will-turn-croydon-into-uks-biggest.html

Yours,
Robin Smith

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PAY-YOUR-TAX
13/11/2012 05:13
Shameless attempts by starbucks to spin their way out of this mess. You have avoided paying your tax, this has an impact on our communities as there is less money in the public purse, stop making excuses, pay your tax.

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chirpycockney
13/11/2012 06:13
Three libraries under threat of closure here in Southport. Pay your tax

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tjsw12
13/11/2012 06:17
There seems to be a world of difference between the message you are giving out currently (poor us we are not v profitable) & which you give to investors (look at us-we're doing just fine).We are not mugs -in the UK we expect companies to pay a fair share of taxation - most do. To mask your profits using cross charges to other territories may be legal but it's immoral. I will not use Starbucks again until you change your ways. A small gesture of around £400 revenue. I hope many others follow suit

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EdgarJW
13/11/2012 06:28
If Starbucks "spend[s] more on store design so the customer experience is as good is it could possibly be," why are your stores so unpleasant?
The decor has been that same molded wood-effect veneer and dusty
sofa combination forever. I can't remember going to one that's not been filthy.. The food you serve is bland and largely unhealthy. The same can be said for the drinks. The staff - 'partners' as they're called, absurdly and misleadingly on another one of these damage-limitation missives...

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EdgarJW
13/11/2012 06:33
... often seem exhausted. Sorry to focus on the subjective, fringe issues - the fact they constitute the front line of your business notwithstanding - but I feel the objective, pernicious corporate structure money stuff has kind of been covered in enough in these comments. Oh and spare us that 'the red cups are coming!' marketing ritual, it's wearing very thin and starting to sound like some kind of creepy death knell.

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Youdontpayyourtaxes
13/11/2012 06:44
I'm never buying your product again, and will tell everybody I come across
to boycott your business.

I'd consider slapping it out of mindless hipsters hands as well.

Corporate vampires, you are beneath contempt.

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Taxpayer1968
13/11/2012 06:47
I'd sack that board of yours if I were you. To be incapable of turning a profit in 15 years of trading, in a market that consumes as much coffee as this one, smacks of very unimaginative and poor leadership.

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kdombaz
13/11/2012 06:59
Well I just became a member just to say "no I will not be buying a thing from your businesses and will actively encourage people to make more informed choices and avoid your businesses".

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Youstolefromme
13/11/2012 07:51
Why should I support a company that effectively steals from me and my children? You are despicable and hide it behind corporate memo-speak.

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skoojala
13/11/2012 08:09
When we all have to pay our taxes in full and so many vital services that people depend on such as day centres and care services are forced to close, isn't it 'immoral' to act to shift UK-based profit offshore to escape high tax bills? I won't buy your immoral coffee and I urge others to do likewise until you do the decent thing.

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hovisceral
13/11/2012 08:37
May as well use the words of kdombaz since they sum up exactly how i feel.

Well I just became a member just to say "no I will not be buying a thing from your businesses and will actively encourage people to make more informed choices and avoid your businesses".

Stop telling lies and pay your **** taxes like everyone else. This idea that you're not profitable in the UK is a total joke.

Man up, Starbucks and take responsibility for yourselves.

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Taxcriminal1
13/11/2012 09:26
You are tax-dodging criminals. Boycotted.

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whazell
13/11/2012 09:29
I will not shop at Starbucks until you alter your tax structures and pay your fair share.

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nerobrown
13/11/2012 10:05
SCUM,SCUM,SCUM,SCUM,PAY UP YOU SCUMMY SCUMBAG COFFEE SCUM PIG BASTARDS!!!

CHEERS

A POOR PERSON

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Jooeee
13/11/2012 10:33
I have opened this account with Starbucks JUST to tell the company how
disgusted I am with their tax avoidance. There is no way you are trading
in this country without making a handsome profit. Therefore you should
pay all the tax due in this country.
Small independent coffee shops pay taxes at an appropriate level and so
should you.I will no longer be buying coffee from you in the same way I am boycotting other tax avoiding companies.

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SteveShark
13/11/2012 10:55
So, you don't pay UK corporation tax because you're trying to grow your UK business?
Why should this country - and by extension its people - subsidise your business?


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Dacrewot
13/11/2012 11:24
Guys how are you all being so negative?
Their accounts explained it to me.
Starbucks pay 20% VAT on everything they buy and then have to pay it too when customers give them money for items. So 40% tax!

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StarFucksTaxTheBiscuit
13/11/2012 14:48
In reply to: Dacrewot

Suggest you take an accountancy course!!

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JCBoyce85
13/11/2012 11:49
I'm pleased to see you've realised how ludicrous the argument "Our low paid staff pay PAYE on our behalf" was. But really you should have deleted the whole post as the rest of it is just as ludicrous. People aren't idiots. You are a parasitic company. Pay your taxes or expect a boycott.

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kayj789
13/11/2012 12:04
I've opened an account just to comment on this and make it clear that, after years of being a Starbucks coffee drinker, I AM BOYCOTTING YOUR STORES until you start paying your taxes. I'm also furious about your letter and attempt to justify Starbucks actions. PAY YOUR TAXES!

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Alytucker1
13/11/2012 12:11
Hmmm, not really buying this. Will be off to a local independant coffee shop once my starbucks card credit has run out. Love your coffee but time to start supporting struggling small businesses who pay their taxes fairly.

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Alytucker1
13/11/2012 12:20
I would have more respect if you grew some balls, held up your hands and said 'yep, busted, and we are sorry and will play fair in future'. The more I read your statement, the madder I get.

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Irreverent_rev
13/11/2012 12:50
Do the right thing and pay your tax or go out of business.

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USTaxpayer
13/11/2012 14:06
Hey folks, to make things worse the founder of Starbucks is over in the States, supporting tax reform on the rich because they "aren't paying their fair share.
We call them "limousine liberals". Hypocritical, maybe?

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StarFucksTaxTheBiscuit
13/11/2012 14:51
Clearly Kris thinks the British public are so dim they will believe this bullshit. Please British public don't prove him right by going into a Starbucks store

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